- Americans benefit from receiving a larger portion of the over $1.2 trillion kept by charitable foundations to offset the economic pain brought on by the COVID-19 pandemic, says a nonprofit organization.
- Institute for Policy Studies is part of a group urging Congress to mandate philanthropic organizations give 10% of their annual capital in charitable donations, up from the existing 5% requirement.
- U.S. charitable organizations are able to make tax write-offs on their entire endowments, but there is lax oversight on how much money the sector is giving and some organizations may not be following the rules.
A group of nonprofits and philanthropic organizations is calling on Congress to unleash a “Charity Stimulus” plan that would push an additional $200 billion into the U.S. economy over the next three years to help offset the damage done by the COVID-19 pandemic.
The best part? It’s currently just sitting around, according to the Institute for Policy Studies.
“The point here is in an emergency like this, if you haven’t figured out how to share maybe we need to give you a nudge,” Chuck Collins, the Institute for Policy Studies’ director for the program on inequality and the common good, told Karma.
The group wants Congress to mandate that philanthropic organizations disburse 10% of their capital yearly, up from the existing 5% requirement. Collins says $1.2 trillion is currently parked in private charity funds and another $120 billion kept in donor-advised funds in the U.S., and he’s part of a group asking Congress to encourage more of that money to be distributed during the COVID-19 national crisis.
“It is past time to surrender to the truth that there is no legacy for any of us if we don’t align our resources now toward a more sustainable and compassionate future,” Aileen Getty, founder and president of the Aileen Getty Foundation and granddaughter of billionaire J. Paul Getty, said in a statement. “We are collectively facing the most dire moment that many of us have seen in our lifetimes.”
Collins says the group of more than 275 foundation trustees, donors and philanthropic leaders — including Getty, Abigail Disney, and Jerry Hirsch of the Lodestar Foundation — who sent a letter to Congress this week requesting action stands a good chance of getting their legislative proposal passed, despite potential objections from philanthropic groups.
Charitable organizations benefit from being able to make tax write-offs on their endowments, but there is lax oversight of how much money the sector is actually donating and some organizations may be skirting the rules, Collins says.
Their measure would discourage the “warehousing” of philanthropic funds during the pandemic and would close loopholes in the law to stop some charities from manipulating the value of their assets.
Organizations should give back to Americans at a time when several millions of people have lost their jobs and many are going hungry, say proponents of charity reform.
Many charities are meeting their giving-targets. The public can access their spending track-record through organizations such as GuideStar, where charities list their tax filings, what portion of funds are spent on charity giving or director salaries, while the National Committee for Responsive Philanthropy also offers information on the sector.